From coal to banking to healthcare: Alabama's economy has evolved over the years and with change the local legal industry has adapted to offer interesting career opportunities...
Chambers Associate: What are the current key industry sectors for lawyers in Alabama?
Jesse Vogtle: Alabama, often called the “Heart of Dixie,” is home to a variety of industries ranging from food and forest products to information technology and aerospace.
The five largest industries are:
(4) Forestry, which is the third-largest in the country
CA: Which practice areas are currently thriving in the Alabama legal market?
JV: The coronavirus has created a lot of work for government and regulatory lawyers advising clients on how to access disaster relief funds made available by federal, state and local appropriating bodies. Navigating the SBA guidelines on the Paycheck Protection Program (“PPP”) has been a challenge for recipients hoping to protect loan forgiveness.
"The evolution of Alabama’s economy from coal and steel to banking, automotive, aeronautics, healthcare and technology has created tremendous change in Alabama’s legal market."
CA: How has the Alabama legal market evolved over the past five years?
JV: The evolution of Alabama’s economy from coal and steel to banking, automotive, aeronautics, healthcare and technology has created tremendous change in Alabama’s legal market. Historically, the larger firms in Mobile, Montgomery, Birmingham and Huntsville were aligned with the large regional banks, but over the years, substantially all of Alabama’s regional banks were acquired and moved their headquarters to other states. Only Regions Bank remains headquartered in Alabama. Loss of these financial centers greatly impacted the growth of Alabama law firms specializing in financial services, corporate, tax, labor and employment, real estate, and litigation/bankruptcy as that work is now being shared with expanding in-house legal departments and out-of-state firms representing the acquiring banks. Consequently, Alabama firms have been forced to become entrepreneurs and expand into upstream legal markets like Texas, Florida, Georgia and Tennessee to maintain growth and profitability. Research and healthcare in Birmingham; science, technology and aeronautics in Huntsville, and the Alabama International Port in Mobile are leading the economic charge to the future, and the local firms are growing in these areas of expertise.
CA: How would you describe the competition between firms in the Alabama legal market?
JV: As key industries continue to grow and invest in Alabama, the competition between firms that service these industries is hand-to-hand combat. No longer are the days when Alabama firms aligned with one or two corporate clients. These days the loyalties have changed and clients are hiring the lawyer, not the firm, for efficient help on legal matters. Because Alabama’s growth compared to other states is slower, the fight to represent existing corporate clients in Alabama results in constant lawyer turnover between firms trying to grow market share by attracting lawyers that control those corporate relationships. The competition for lateral attorneys and practice groups is fierce. Hiring new attorneys directly from law school has taken on less priority. Firms are looking to bolster earnings by adding experienced attorneys with books of business.
"No longer are the days when Alabama firms aligned with one or two corporate clients. These days the loyalties have changed and clients are hiring the lawyer, not the firm, for efficient help on legal matters."
CA: What do you think the Alabama legal market will look like in five years’ time?
JV: Two courses of action will occur simultaneously as lawyers follow their clients and strive to make their services relevant:
(1) The legal market in Alabama will continue to evolve with the growth of boutique firms spinning out of the larger firms. This will happen for two reasons: (i) the ability to offer specialized services at a cheaper rate and (ii) the ability to decrease overhead per lawyer allowing for the more competitive pricing for services rendered.
(2) National firms will continue to merge with regional firms to gain and consolidate books of business to better provide industry expertise throughout a client’s footprint. As the corporate world continues to consolidate and find efficiencies, so will the professional service providers including lawyers and accountants.
Finally, Alabama’s larger corporate firms will continue to invest in resources outside of the State of Alabama to gain access to more robust economies in the Southeast.
CA: What effects do you think Covid-19 will have on the Alabama legal marketplace in both the short and long term?
JV: Lawyers over the age of 50 have been forced to join the 21st century technological age and learn, like their junior colleagues, how to use remote computer systems, social media platforms, video conferencing technology, and function independently and profitably in a remote work ethic. Remote offices now exist in substantially all homes around the country and are not going away.
Short-Term - the impact on Alabama law firm’s office space will be minimal given the long term nature of commercial real estate office leases.
Long-Term - the need for office space will be severely impacted as law firms and their clients learn to do more with less commercial brick and mortar, and focus on virtual technologies to organize teams and do their jobs at a greatly reduced expense and improved quality of life.
"The legal market in Alabama will continue to evolve with the growth of boutique firms spinning out of the larger firms."
CA: What distinguishes the Alabama market in comparison to other US legal markets?
JV: Technology has allowed Alabama lawyers to competitively practice law on a national platform. Generally speaking, large firm practitioners in Alabama presently have their office minutes from their homes, schools, parks, beaches and lakes. An Alabama lawyer can have a very sophisticated legal practice, low cost of living, and a great quality of life to raise a family.
CA: What do you think are the main pull factors to the Alabama market for law students and lateral talent?
JV: Alabama firms can provide a challenging professional career without enduring the logistical headaches in the larger legal markets.